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End of Swiss banking secrecy in sight by 2018/economy/news/641216

End of Swiss banking secrecy in sight by 2018

Agence France Presse|Published — Wednesday 8 October 2014

GENEVA: Switzerland’s embattled banking secrecy could be dealt a final death blow in 2018, after the government decided on Wednesday to launch talks with other nations on the automatic exchange of account details.In a statement, the government said it had “adopted definitive negotiation mandates for introducing the new global standard for the automatic exchange of information in tax matters with partner states.”“Negotiations with partner states should commence shortly,” it added.Long the bedrock of the Swiss financial sector, banking secrecy has come under mounting pressure since the global financial crisis.The United States and European Union — of which Switzerland is not a member — have repeatedly pushed the Alpine country to give ground as they try to crack down on tax cheats who stash cash abroad.The financial crisis, combined with scandals such as the Bernie Madoff fraud case in the US which rippled across the world’s banking sector, have spurred a tougher global regulatory environment.The Swiss government had already announced plans to hold talks on information-exchange but had to formally adopt a negotiating mandate before they could begin.“Switzerland reaffirms its intention to introduce the statutory basis for the automatic exchange of information in a timely manner so that Swiss financial institutions could commence collecting the account data of foreign taxpayers in 2017,” it said on Wednesday.“The first exchange of information could take place in 2018, subject to parliament and possibly voters approving the necessary laws and agreements in good time,” it added.Switzerland has lagged behind a group of 40 countries which have already announced that they will adopt new international standards, start collecting data in 2016 and exchange it from 2017.It previously agreed to give ground in some areas in order to defend the overall principle of privacy.For example, bilateral deals with Britain and Austria force depositers who have not declared revenue at home to come clean with their own governments or have their accounts taxed by the Swiss, who then transfer the funds without naming the clients.But the likes of the United States and France have been unwilling to let Switzerland do anonymous tax collection on their behalf, and Switzerland ultimately caved in to their demands to hand over details of undeclared accounts.Swiss banks, meanwhile, have faced massive lawsuits from aggrieved countries who accuse them of abetting tax dodging.In the wake of such challenges, the banks have chosen to order foreign clients to get their tax affairs in order or face having their accounts blocked.